There is, of course, a grain of truth to the claims that much of the prime property across London sits unoccupied. There are indeed many properties protecting the wealth of Saudi Arabian, Russian and Chinese investors and, perhaps, it’s reasonable to suggest that in a city where housing is a real issue there are better ways to use the property.
As it stands, the high profits and quickly growing rental incomes are being had from the surrounding boroughs of the capital. Areas like Chatham, Gillingham, Reading and others on the commuter belt have, for some time, been quickly increasing their profile and with them the asking prices for their property.
Sensible investors and developers are already starting to flock to these outer boroughs with new projects now starting to multiply quickly as young professionals and families look for more cost effective alternatives to paying sky-high rents in the city centre.
In an article for The Guardian, Rupert Neate has written about how councils around the centre of London “have granted property developers planning permission to build more than 26,000 luxury flats priced at more than £1m each, despite fears that there are already too many half-empty “posh ghost towers” in the capital.”
The numbers seem to stack up, too, with Neate claiming that around inner-London, there are currently 7,749 apartments being built which are set to be prices between 1 and 4 million pounds, with permission already granted for a further 18,712 in the same price bracket.
The research – for private bankers at Coutts, shared exclusively with the Observer – appears to show that there are now more luxury apartments planned in the city centre than ever more, despite mounting political and financial pressure to invest in more affordable projects.
With the apartments being constructed in the city centre costing upwards of £1 million, on average, we might compare that to other projects such as X1 Chatham Waters, where prices start at just £190,000, we can see why those interested in working in the city are increasingly choosing to live outside of it.
Shockingly, Neate also revealed that of the apartments and properties costing over £1 million, of which there were over 1,900, the developers failed to sell even half of them. The research, undertaken for Coutts by LonRes, revealed that despite planning permission being granted as quickly as ever, sales rates were extremely poor.
This is in comparison to those developments which are being undertaken around the city, where projects such as X1 Chatham Waters are selling extremely quickly, and the problem becomes apparent.
It’s hard to imagine a situation ever arising where people and young professionals wouldn’t want to work in London, one of the busiest and most exciting cities in the world. In finance, media and tech the city leads most in the world for opportunity, but it’s becoming increasingly clear to those perusing a career in London that housing on their doorstep is never going to be a reality.
Why would that be an issue, though? With largescale apartment developments taking place within 45 minutes commute of the city centre, there seems to be a growing popularity for living outside of the craziness of London life. Horror stories of broom cupboards being rented out for thousands per month are commonplace, and when apartments can be rented in Chatham or Reading for half the price, it wouldn’t be surprising to see them grow even more in popularity.
There does seem to be an issue with the misuse of prime property in the city centre, but savvy developers and investors won’t mind too much whilst innovative and affordable property grows in popularity outside of the city centre zone.
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